Chinaberry Makes Cuts, Lays Off President

Pressured by its bank to turn a profit this year, books and gifts mailer Chinaberry laid off president Gary DeMaine on June 6. Ed Ruethling, an owner of the $8 million cataloger and former vice president of marketing, has assumed DeMaine's position.

“It was very clear we needed to affect operating expenses,” Ruethling says. “And consolidating Gary’s position was one way to do that along with the elimination of his salary.” In addition to the namesake catalog of children's books, Chinaberry mails the Isabella catalog of spiritual-themed books and gifts.

DeMaine, who had to lay off director of marketing Mel Concors in March, says that Chinaberry “has had a difficult first half of 2003. We pushed for growth, and the sales-to-marketing costs are putting extra pressure on this year's profit forecasts...We have made as many general and administrative cost cuts as we could, and it is better for Chinaberry to keep the operating management team together and lay me off."

Facing increasing competition from behemoth booksellers such as Amazon.com and Barnes & Noble, Chinaberry had flat sales in 2001 and 2002. This year, the company bumped up circulation modestly from 2.9 million in 2002 to 2.95 million.

“We’re just pulling in, consolidating, meeting our bank covenants—which is what drove us to this point,” Ruethling says. “For loans, the bank has certain requirements, one of which is we need to be profitable this year.”